How We Invest

Investment Process

The Parnassus equity funds follow a company-specific investment process to evaluate the
intrinsic value of the company based on the future relevancy of the company's products or
services, sustainable competitive advantages and management. Once we determine that a
company's intrinsic value is increasing, we perform a detailed valuation analysis to
analyze the underlying fundamentals and economics of the company. This results in a
three-year range of outcomes for the stock and an assessment of the risk of permanent
loss of capital. We monitor a company's stock price until it falls to a level that
generates an acceptable, risk-adjusted expected internal rate of return and initiate
a position based on the expected return profile.

Portfolio management sets position sizes according to a proprietary "core" and
"opportunistic" capital framework. All positions have a core component, which is based
primarily on the risk of permanent loss of capital. For certain positions, opportunistic
capital is invested on top of the core position. This approach allows us to take advantage
of short-term volatility within our long-term holdings.

The Parnassus Fixed Income Fund investment process begins by formulating a macroeconomic
outlook for the next three to five years. We then determine the appropriate exposure
to both market and credit risk based on our economic and interest rates forecast.
Our assessment of market risk leads to the selection of a duration target and yield
curve positioning of the portfolio. The final step consists of selecting securities
that meet the duration, asset class and sector targets established in the previous
steps. We leverage our expertise in fundamental equity research to select individual
debt securities, and we apply environmental, social and governance (ESG) screens
to our investment universe.

Before investing, an investor should carefully consider the investment objectives,
risks, charges and expenses of a fund and should carefully read the prospectus or summary prospectus, which contains this and other information and can be found in our Forms and Documents
section. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than their original principal cost,
and you could lose money.

The Parnassus Funds are underwritten and distributed by Parnassus Funds Distributor,
a subsidiary of Parnassus Investments and a
FINRA member.